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  CSPAN    U.S. Senate    News/Business.  

    July 27, 2011
    5:00 - 8:00pm EDT  

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particularly on this side the aisle want to protect. but they're actually there 10, 20, 30 years from now. the notion that they're not going to change, aren't -- cannot be continued to be sustainable. it is not democrat, republican. it is just the fact that thank goodness a lot of us are living a lot longer. the fact remains when i was a kid sthr-rp 16 -- there were 16, 17 people paying in for social security retirement. now there are three. we've got to make sure your kids, my kids, that there is social security in its framework. at the same time we've got to have our colleagues on the republican side recognize that you've got to reform our tax code in a way that makes it simpler, flatter and, yes, generates some additional revenue.
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the only way we're going to get there if and when we get past this august 2 date is if we combine that effort with a long-term debt reduction. i am more than open to any valid, balanced, comprehensive bipartisan plan that's around. the effort that the so-called gang of six, or the third of the senate that said, hey, yeah, this is worth considering isn't perfect. i can assure. some will even say some of the prescriptions i made, it might not meet all of those. i'll tell you three things it is: it is comprehensive, it's bipartisan. and under any analysis, it does what our country desperately needs: starts to drive our debt to g.d.p. ratio, which is a fancy way of saying can we maintain our books on a path to lead to fiscal stability.
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frankly, what that would also allow to us do is to get back to what we should be spending our time on here, which is creating growth in this economy. start unleashing american creativity and innovation again. but that's not going to happen if we spend all our time going back and forth about how we got here, which short-term plan best meets the short-term interest of the next five or six days. i, for one, believe the plan that senator reid's laid out is not perfect, but it gives us the time to deal with this debt and deficit problem in a serious way. it gives us the ability not to ensure -- to ensure that we don't have a debt downgrade. the plan that's being,
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unfortunately, debated in the house right now, it may have some errors. but the one thing that is clear is is that it will lead to a downgrade. not my words. but all the rating agencies, whether we like them or not, they are the folks who set that standard. so i would urge again the folks who are making statements that say we're going to fight you on the beaches, we're going to fight you at sea, we're going to fight you in the air, to use your fellow americans here and if you don't like our system of government, be honest and propose a change but change the parliamentary system. if you do honor the constitution which we said we'll uphold recognize that is a constitution that puts in place checks and balances to have us all give a little and recognize when we get out of bed in the morning we're not a democrat or republican, but an american first and
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foremost. mr. president, i hope and pray that we will find the path through these next five days, that we won't do the unthinkable. i've said on a couple of stations -- i'm sure it will come back and bite me -- that we don't do this, we should all get fired. because the fact is the most basic promise we make is to uphold the laws and rules of our country. and, frankly, i can't think of anything that's more quintessentially american than making sure you pay your bills and you honor your obligations. so let's get that done and then let's work together make sure we put in plan the long-term comprehensive bipartisan approach that's needed so that we can get this nation back on the right fiscal path. but more importantly, back on the right path to ensure that everybody gets that fair shot and that economic growth that we all seek so much.
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with that, mr. president, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: g officer: the
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senator from oklahoma. mr. coburn: i ask that the quorum call be dispensed with. the presiding officer: without objection. mr. coburn: i ask to speak as if in morning business. the presiding officer: without objection. mr. coburn: thank you. we have a lot in front of us as a nation, and my perception is that our country is anxious, and i think they have good reason to be anxious, but it doesn't have anything to do with the debt ceiling and the debt ceiling debate. they should be anxious because we're not listening. we're not paying attention to the anxiety and fear and worry that the country they know and the freedoms and liberties that they have are slipping away from them. and they're slipping away because we're putting america in
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a debtor's prison. we're slowly losing our ability to make free choices about our future because we failed to be responsible in the past with the money that the american people have given us. we've had a lot of debates and a lot of statements in the last couple of weeks, but no one ever talks about what the real problem is. the real problem is we're spending money on things with good intentions, that don't accomplish their purposes. we're spending money that we don't have on things that we don't absolutely need. and the programs that we do have, we fail to oversight to see that they're running both efficiently and effectively. consequently, we find ourselves in the midst of an economic downturn with a $1.5 trillion to
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$1.6 trillion deficit borrowing $4 billion a day. that means every day and a half we borrow more money than the state of oklahoma spends in a year. and we hear all the political speeches and all the finger pointing, but we don't hear the real solutions to our problem. and let me explain what i mean about that. everybody agrees we're going to have to make some cuts, but not everybody's honest about the numbers associated with those cuts. everybody agrees that we're going to have to tighten our belt, but nobody wants to offer specifically where we tighten our belt. and what i wanted to do today is to offer specific places where the government today, right today, in this body and the one across the capitol, could make a big difference in the outcome of our future by cutting specific programs this week and next week.
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that's one rare thing you never hear in washington. everybody says you need to cut. when it gets down to talk about what you cut, nobody wants to come up with any cogent ideas because they don't want to take the political heat, because everybody program, no matter how well-intended and how inefficient, has those people who are going to fight for that program because there's money coming into the coffers for somebody. the other point that i would make is the reason we're anxious and the reason we're worried is that we've abandoned the very principles that our founders gave us that would keep us healthy. and that was the constitution and its enumerated powers section, which spells out very succinctly what was our responsibility and what was the states' responsibility. and so we have whole departments. one, for example, would be the
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department of education. that thomas jefferson said if you ever had the federal government doing anything on education, you would have to change the constitution. that's a direct quote of his. now, he -- he was one of our founders, and he as well as madison and monroe and others wrote extensively about what their intentions were in the federalist papers, and yet we have allowed ourselves to be walked like in a dream state into the contention that the constitution doesn't make any difference and that it would, in fact, if we paid attention to it limit our opportunities for the mistakes that we have made. the mistakes we have made, although well intentioned, is that we can be the answer for every problem in america. we can't. what made our country great was self-reliance, individual freedom and initiative, personal
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responsibility and accountability. that's what built our country, in a system that said if, in fact, you work hard, the opportunity is there for you to gain, for you and those you love. and now we have a government that at every place, every decision that is for economic benefit for those individuals that would grab that dream, they are confronted with the layers upon layers of bureaucracy and rules and regulations to the point where no longer are you presumed innocent by the federal government, you're presumed guilty and you have to prove yourself innocent to the bureaucracy to be able to accomplish that which would set you free, that which would put you ahead, that which would establish you an opportunity to gain the wealth that this country promised. i have put forward a week ago last monday $9 trillion in potential cuts.
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now, i know people aren't all going to agree with me, but every one of these cuts is backed up with a government study that says what we're doing in these programs aren't effective, whether it's the congressional research service, the inspector generals, the government accountability office or o.m.b. or the congressional budget office. there is over 3,000 footnotes to the 600 pages that are in here that explains very well why we shouldn't be doing this this $9 trillion worth of stuff. and i understand that you could have a great debate on whether or not one, it's our constitutional responsibility. some of it certainly is when it comes to defense. and number two, you could have a great debate on what you think are priorities, those that fit within the constitution that are our responsibility, but you can't debate the facts of the
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outright waste, the outright fraud, the outright abuse and the outright duplication of multiple sets of programs. and so all you have to do is -- and this is a far from complete list, but here over the next ten years, we could save save $150 billion to $200 billion, just by eliminating duplicative programs. we have over 100 programs on surface transportation. that's 100 sets of bureaucracies, 100 offices, 100 sets of regulations, 100 sets of rules, and the question is if we have responsibility on surface transportation, why in the world do we have 100 different programs? we have 82 teacher improvement
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and training programs run by the federal government. nobody will come down here and answer me why. it's indefensible that we have it. yet nobody will come down here and join me to eliminate it. we have to be asking the question do we have good reason to be anxious when we won't do the obvious? we have 88 -- we have over 180 economic development programs but we have 88 economic development programs that we spend $6.8 billion on a year, run by four different separate agencies, and not one of them has a study that shows they are effective in developing economic activity, not one of them. so why would we continue to send money into programs with good intentions that aren't working? and yet, we have over 100 of them, 180 of them, 88 within
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four departments. we haven't been able to find all the rest of them, but we know they exist. it's 88 sets of bureaucrats. well-intentioned federal government workers doing what this congress and congresses before us have told them to do but not accomplishing the purpose for which that money, almost $7 billion a year, is sent. we have 80 other programs for transportation assistance. you see the little community vehicles, the ones to help those that have a disability. why do we have 80? nobody can answer that. it's easy to figure out how that happened. they are well intentioned. we ought to help people that can't get around. the question that ought to be asked is that a state responsibility for a federal responsibility? and if it's a federal responsibility, that's debatable, but if it is, why would we have 80? we have 56 different programs
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run by seven different agencies to teach americans financial literacy. you have got to ask yourself the question how can a government that's run on a $1.6 trillion deficit, has $14 trillion in debt, our debt to g.d.p. ratio is at 100%, how do we have any authority to teach anybody about financial literacy? that's number one. number two is where is that in the constitution that we're responsible for teaching people financial literacy? that's both a state function, a city function and a family function. and yet, we have 46 programs. not one of them has the metric to measure whether or not it's effective. not one of them. job training, we spend spend $18.8 billion on job training. this last year, we have 47 different programs. the government accounting office says of those 47 programs, all of them overlap except three. so based on the study of the
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people we pay to study this, the most we should have is four job training programs. and we're going to spend spend $18 billion, almost $19 billion on that, and here's what we know. the results can't justify that we're spending the money because the results don't show performance, and yet we're spending $18 billion. we have 20 different programs for homeless assistance and prevention. that's a great role. we all want to help the homeless. we want to do whatever we can to get them in a stable situation, to assist them, but 20 different programs? why would we do that? why wouldn't we have one? and why wouldn't only the one program be administered through a state if, in fact, it's our role? i happen to think that's the state of oklahoma's role, to take care of the homeless people in oklahoma, not the federal government's, but if it is the federal government's role, why
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would we have 20 programs? food for the hungry. 18 separate programs, five different agencies. five different agencies. again, i'm all for helping those people who need to have food. why would we have 18 sets of bureaucracies, 18 different sets of rules, 18 different sets? and two of these actually work. 16 don't. but we haven't eliminated them. we're still sending the money out the door. disaster response and preparedness. inside fema, just for disaster response and preparedness, there is 17 programs just inside fema. that doesn't count all the disaster response and preparedness programs in all the other government agencies. that's just inside fema. you've got to ask the question what are we doing? one, what have we done in the past and what are we going to do about the problems that are in front of us today?
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so i would propose that we're off base and you have got a good reason to be anxious about us because we won't address these problems. when we bring amendments to the floor, they get routinely defeated. why is that? is it that we're being dishonest about the facts? or is it we're protecting the politicians so that they are not attacked by the very people that are benefiting indirectly -- not directly but indirectly from these programs, the bureaucracies and the other quasigovernmental agencies that feed off these programs. so where do you go to start fixing this $1.6 trillion deficit? i had some wonderful employees of the social security
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administration come to me about a year and a half ago, and they said -- and they wanted to remain anonymous, and i understand why. they said our disability program's broken. we're giving disability checks to thousands of people every year that are not disabled. so we started looking at it in the permanent subcommittee on investigations, and here's what we found. if you take veterans totally out of the mix, this doesn't apply to veterans, one in 18 people in this country today are collecting a disability check. as a physician, i have done all sorts of disability examinations, and what we're finding is about 40% of the people who are on disability aren't disabled because the law says this: to be disabled in this country and to receive a check from the rest of us for that disability, there can be no job in the economy that you can
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do, and yet we have judges that never deny anybody when they come through the disability program, we have people on disability that are working full time at other jobs, and once you're eligible for disability, two years after that you're eligible for health care. so now we have undermined the system that was designed to help the truly disabled by having thousands upon thousands upon thousands of people collecting disability checks that means there is not going to be a check for somebody else. the disability trust fund which we pay into when we work, as well as s.s.i., which is a separate fund that comes just from your tax dollars, they are belly up. next year, social security and disability trust fund runs out of money, and the reason it's running out of money is the social security system doesn't go to say if you were disabled, now you're not, why are you still taking the money back at
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work? they don't do their job because the leadership in social security doesn't demand the job is being done. and so we have significant ways of improving that to make sure we're helping those people who are truly disabled, but you can't get anybody to help you get that law passed. and to say you want to clean up social security disability, it doesn't mean you don't care about the people that are disabled. it means you care about those that are going to be disabled in the future so that we'll have a dollar to help them when that need arises for them. and so it's just one of those areas that hadn't been looked at in 25 years. the social security system, once you're on, you're on. they rarely take anybody off. and the fraud associated with collecting a disability check and working for cash in our economy and working not for cash, even working full-blown jobs. we had three instances where we had the government accountability office filled people, two actually had salaries with the federal
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government and were collecting checks from federal disability at the same time they were collecting checks from the federal government as a federal employee. and it's not small, it's big. and so there is $60 billion a year that -- i mean over ten years that we could save just by reforming the social security and disability system. and that doesn't say you don't want to help people that are disabled. it says you want to do what's the best thing for our country and help those people that are disabled. but we have undermined and we have taken advantage of those who need our love and care and they cheat the system and we have a bureaucracy that doesn't take them off the system, and we have an incompetent system of jurisprudence within the social security administration that puts people on that should never be on. but the attack comes that you don't care about people if you -- if, in fact, you want to fix this program. social security, everybody says don't touch social security.
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this congress and the congress before it has stolen stolen $2.5 trillion from the money you have put into social security. they have written a little bitty i.o.u. note there and said, well, when you need the money, we'll pay it back. well, what does that mean? that means the full faith and credit of this country has to be good enough that when we get ready to pay the $2.5 trillion back, that we can borrow the money at an acceptable interest rate to be able to pay it back. so what does the social security trust fund administration say we need to do? you have to make it sustainable. and, oh, by the way, wouldn't it be nice that if the poorest people on social security could get a little bump so you could help those that are truly dependent on it and make it sustainable so that we never have to discuss social security again, even with the baby boomers, you ought to do that. and so what we've done is design, based on social
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security, on a solvent path over 75 years and likely to achieve -- we didn't raise anybody's taxes, we helped those most in need the most and those that were most well off we said you can't have quite as much. in other words we means tested it. we said if you're very, very wealthy you're eventually get your money out but not like everybody else will. the people that need at this time most are going to help the most. it alters the retirement age just to go along with the life expectancy. it doesn't alter it a lot. it alters it two years over 60 years but the fact is, is our life expectancy is far advanced from what it was when we first started social security. when we first started we had almost 50 people working for everybody that's on social security. now we have less than five. and it's not going to be long we'll have less than three. it's not sustainable unless we change things. so the point is, i understand social security's important to people in this country.
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but if we don't change it in 2035 you're going to get 2/3 of the benefit that you put in. you're not going to get any more than that. so do we fix it now and make it sustainable forever, or do we just wait until it goes belly up, knowing we can't borrow the $2.5 trillion we have stolen from it and let it go belly up? the typical politician says i don't want to do that because i don't want to take the heat from the people on social security or coming on social security. i don't have any problems. it's the right thing for us to do. we got to fix it and we can fix it if in fact we're going to save our country. that's one of the things that we have to do to make sure that the people who buy our bonds, loan us the money, they have to recognize that we've got a salvageable situation. ignoring social security, it's our second biggest thing now other than health care. it's our second biggest thing.
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and to ignore it and not fix it says we won't be able to borrow the money for it or anything else. let me spend a minute just kind of going through a couple of things that we can do next week that would save a lot of money. not hard. really not controversial. and the question america ought to ask is why -- why haven't we already done it? let me give you some examples. we ought to quit paying unemployment compensation to millionaires. do you realize that last year we paid $20 million out in unemployment compensation to people who were making a million dollars that year? is that nuts or what? unemployment is to help those people who are in need who are unemployed. it's not to give money to people
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who don't need it because they're unemployed and yet we spend almost $20 million last year paying people who made a million dollars last year unemployment compensation. we could save a billion dollars over 10 years by quit making payments to dead people. you say you don't make payments to dead people. yes, we do. $100 million a year. the bureaucracies pay to people who are dead. and a good portion of it we never get back. it's gone. we don't follow it up. we know we could save $5 billion a year minimum, minimum, if we just eliminated some of the overlapping programs that i talked about. that's a very conservative estimate. it's probably more like $25 billion a year.
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but let's say it's 1/5 of that. $5 billion a year, that's $50 billion that would keep us from borrowing money for 14 days. just by eliminating duplication in government programs. we could eliminate $2 billion over 10 years by eliminating sweetheart contracts and bonuses to contractors who work for the federal government who don't earn their bonuses. yeah, we do that. we pay bonuses to people who both don't perform and don't perform on time. you wouldn't do it. if somebody came in to do something for you on a fixed price with a bonus based on quality and time, and they didn't meet it, you wouldn't pay them the bonus but your federal government does anyway. we could save a billion dollars over 10 years by collecting
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unpaid taxes owed to us by our own federal employees. taxes that are owed, they've been adjudicated, there's nothing else going on, it's final, it's set, but we don't take the money out of their pay. so that number is growing every year. the amount of money that they owe. we could save $3.82 billion by reducing the amount of money congress spends on itself by just 15%. would it be too much to ask of the congress to tighten its belt by 15% and save one day's borrowing? no. i turned back on average about $500,000 to $600,000 a year. i know how to run an office efficiently and pay people effectively. but the fact is that we have too big a budget. and we need to trim it and we
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need to lead by example. we can save $480 million a year by having the health resources and services administration, pay the right prices for drugs in their programs versus paying too high of prices, prices higher than what they contracted for. you know, half a billion dollars doesn't sound like much, but half a billion dollars over 10 years, that's a half a billion. that's, you know, that's 1/30, 1/300 of what our problem is right now in terms of the deficit. we could save $5 billion by eliminating unnecessary government printing. we could do that tomorrow. $5 billion. we can get $15 billion back by getting rid of unnecessary government buildings that we're not using that are costing us
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$8 billion a year to maintain, and eliminate them. we have -- i can't remember the exact number. i think we have 63,000 facilities right now, the federal government owns, 63,000 that are underutilized or not utilized at all. that's 12,000 more than we had two years ago and we're signing new leases all the time and abandoning buildings that the government owns. the federal government should dispose of excess properties within five years. according to president obama's own administration we could save at a minimum $15 billion. every time we've tried to do this, somebody stops it in the senate. we could end subsidies for ethanol blending. we voted on it, had 74 senators voted on it but it didn't happen. $2 billion that we could save if we passed it tomorrow.
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we could decrease the number of limousines owned by the federal government, save $115 million. we could reduce the federal vehicle fleet $5.6 billion. the federal government -- you won't believe this number -- the federal government owns 662,000 cars. 662,000. the average mileage on them is less than 20,000 miles. the fleet has grown by 25% -- 5% and the cost of maintaining and sevicing the fleet has grown by over 25% in the last two years. $4.6 billion a year just maintaining these 600,000-plus cars. the amount of vehicles in our fleet could easily be decreased
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by 20%. we have all the capability of having go to meeting, of having internet, of having live chats, of having telecommunications with visual conferencing, have all those things available. we don't need the cars we've got and even the obama administration agrees we could do that. we could save $43 billion by decreasing travel by government agencies. same reasons. we spend $15 billion a year on travel. $15 billion. anything that isn't mission critical and that could be done through teleconferencing ought to be done. we advertise -- the advertising budget for the federal government, $5.6 billion a year.
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they don't pay for ads -- public service ads. this is ads outside of public service ads. $5.6 billion. we spend a billion dollars a year hosting government conferences. we could save $4.1 billion -- the federal government now owns 685 million acres in the united states. the cost to maintain that, we're not funding, so the land is falling in worse disrepair, and we're adding land every year. there's lots of land that we could give up that isn't precious resource, isn't heritage areas, isn't forest, isn't parks, yet we own it. we could save a lot of money by not having so much land and put it back on the tax rolls. we could save $4.1 billion just on the last two years' average in terms of slowing down and not
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buying additional land unless there is a direct necessity for the federal government to have it. we could save $19 billion over 10 years by combining the p.x.'s and exchanges on our military bases. $19 billion just by putting them together. that's what we could save. the presiding officer: the senator has used 30 minutes. mr. coburn: i would ask for three additional minutes. the presiding officer: is there objection? a senator: reserving the right to object. i will not object but i would like to add three minutes to my time as well. the presiding officer: without objection. mr. coburn: let me just end with this.
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it costs us to educate a student on our military bases annual average of $51,000 a student. if you look at the locations for all those -- where all those are located the cost outside of that is 1/4 of that. we could easily do that and pay the communities, but we won't. i'll end with this -- we can solve our problems. there's $9 trillion worth of specific savings in this. don't have to agree with all of then. don't even have to agree with half of then. if you agreed with a third of them, we'd be well on our way and the fact is nobody wants to be specific, we need to be specific. everybody wants to talk in generalities, nobody wants to make the hard choices. hard choices is what we're here for. our time has come to stop living the next 30 years on the backs
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of our kids. it would be my hope that as we go through this process the next two weeks that we will see a renewal in the spirit of our country that says we are going to live within our means, we're going to reward self-reliance, reward individual accountability, we're going to reward personal responsibility and we're going to put the role of the government back to what it should be, both at the federal and state level, and have a commensurate policies that will reflect that that will renew our country, that will create jobs, that will create opportunity for the future of our country. with that i yield the floor. a senator: mr. president. the presiding officer: the senator from california. mrs. boxer: i want to say to the senator from oklahoma that standing up and offer the list
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that offer opportunities for saving. on my list we know well over a trillion dollars that owe money to the united states of america and haven't paid it. if we even got a portion of that over the ten-year period, that's over a ten-year period,about we could do this. and i look forward to working with him on this. but tonight we are not facing a three-week time frame as my colleague perhaps suggested. we're just facing down a five-day time frame. and we are facing a manmade crisis here. by that i have to say a republican-made crisis on raising the debt ceiling. we have never in the history of this country faced a situation like this. why do i say this? because the debt ceiling has been raised 89 times. 89 times.
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and i could tell you, because i voted for it a number of times, and voted no four times. yes, on occasion you vote no on it to send a message, but you don't bring it down. i've never seen anything like this. we're going down a dangerous path, and when i say we have raised the debt ceiling 89 times, that is in the record. 55 times, mr. president, under republican presidents, 34 times under democratic presidents. the debt limit was raised the most times during ronald reagan's presidency. during his eight years, the debt limit was increased by 200%, and this is what president ronald reagan said when it was time to raise the debt ceiling, which,
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again, under his presidency was raised 18 times. he said, "the full consequences of default -- or even a serious prospect of default -- by the united states are impossible and awesome to contemplate. denigration of the full faith and credit of the united states would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. the nation can ill afford to allow such a result." that was ronald reagan in a letter written to senator howard baker in 1983. the debt limit was raised seven times during the presidency of george w. bush and during his eight years, the debt limit was increased by 90%. honest-to-goodness, mr. president, i don't remember one republican colleague -- and i could be wrong on this -- that suggested we don't raise the
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debt ceiling when george w. bush was president. and i'll tell you something, we all know when you raise the debt ceiling, it's for debts already incurred. and george w. bush took a surplus of over $200 billion a year and he turned it into a deficit. and the reason we have to raise the debt ceiling mostly is because of george w. bush. i never heard one republican in those years say let's bring this down, let's not raise the debt ceiling. they went on a binge. they put two wars on the credit card, mr. president. they never paid for those wars. they put a tax cut to the richest people in america on that credit card. they didn't care. they put a prescription drug
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benefit which tied the hands of medicare and said you can't negotiate for lower drug prices and instead of being affordable for the government it became a budget buster. they put that on the credit ca card. i never heard them say, "let's not raise the debt ceiling" even though under their policies they took a surplus and they turned it into a deficit. they took us off the path where we were about to finish up with our debt, frankly, and added debt as far as the eye could see. hypocrisy, honestly -- and i'm being cautious about the way i express myself here in the senate -- hypocrisy doesn't even begin to describe what's going on here. it's disingenuous. it's -- it's just plain wrong to play politics with this.
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and we know politics is at play here. now, i've run for election many times in my career -- i think it's 11, 12 times -- and i know that you have to pay attention to politics when you're running. we all understand that. we're not naive about it. we're tough on the trail. we know but there is a time to govern. there is a time to set aside the politics and govern. if ever there was a moment in history, it is now. i have to say, my friend, senator coburn, said, people are anxious in the country, they're anxious in the country, but they're no not anxious, he basically said -- he said this specifically -- their anxiety
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has nothing to do with the debt ceiling. i disagree respectfully. anyone who has a 401(k), who's seen the stock market go down 400 points, is worried. anyone who gets a social security check who fears we could default is worried. anyone on medicare is worried. anyone on veterans disability is worried. every federal employee is worried. every federal private contractor and business is worried. every worker who works for those people, they're worried too. because they know if we don't come together, mr. president, in a fair compromise, they know very well that we will not be able to pay all of our bills. now, again, raising the debt ceiling is something you have to do because you've already
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incurred all of these debts. and i want to talk a little bit about how we got into this unnecessary crisis and how we need to get out of it. we got into it because republicans said they wouldn't vote for a clean increase in the debt ceiling, as has been done 89 times before, they wanted to extract a pound of flesh and s say, we demand that you -- that you cut spending now, tie it to this debt ceiling and that's what we want. and we said, okay, we're ready to talk. as a matter of fact, the democrats on the budget committee put out an excellent plan. it cut not $850 million, as john boehner's plan does, but $4 trillion. and it protected social security and medicare, and it basically
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said we've got a problem, we're going to solve it with $2 trillion in cuts and $2 trillion in revenues. 50-50. kind of a fair way to approach this. and going to ask the millionaires and the billionaires to pay their fair share. frankly, that plan, to me, is the ideal plan. it's the fair plan. it gets us on fiscal ground, safe, good, solid fiscal ground, and it says half cuts, half revenues and we will move forward and look at medicare and social security to make them stronger, not to cut benefits. now, if i wassabilitying like the republicans over in the house, i would stand here and say that's the only plan i'll ever consider. i love that plan.
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it speaks to my values. it speaks to my state's values. but i understand. in a negotiation, in a situation like this, no side gets everything they want. so now, president obama says let's all come together and let's work on a plan. let's do something big. let's do something real. and first eric cantor, the republican whip, marches out of there with his teddy bear and republican blanket. and then a few weeks later, boehner walks out. i just have to say, i watched speaker pelosi sit at the white house many times. she sat across from george w. bush. she did not agree with him. she felt that he had added to the debt.
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she felt he had added to the deficit. she disagreed with him on protecting millionaires and billionaires. she disagreed with him on the environment. she disagreed with him on the war in iraq nancy pelosi never stomped out of a meeting. i find it, frankly, appalling that that's what happened. but the president keeps reaching out because he will take the personal hits because this country gave him everything and he's not going to allow it to fall and to default and to become a deadbeat nation. so speaker boehner said, i'm going to put together my own plan, sew puts together his -- so he puts together his own plan. frankly, it has hardly any cuts.
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it comes back, $8 auto million5n cuts. doesn't get problem this problem we're facing. he -- doesn't get past this problem we're facing. he only raises the debt for five, six months. we're going to be back in this soup, back into this chaos, back into the market selloffs, back into the uncertainty, back into time when people can't even sleep well at night. because speaker boehner and his people over there want to keep this thing boiling over. they think somehow it's good for them. i say, it's not good for them. but you know what, i don't care if it's good or bad for them and i don't care if it's good or bad for us. what i care about, what you care about, what we care about is this nation. that is everything to us. and we have to stand up for this nation, and that means we have to leave the political labels at the door and we have to set aside our favorite plan, like
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i've set aside my favorite plan, and support a real compromise. well, let me tell you the real compromise that we have before us. it is the reid approach. it is a real compromise, because what does compromise mean? nobody gets everything they wa want. but everybody gets something that they want. what do the republicans say they want? they wanted cuts and no revenues. they got that the i that in the. our leader, majority leader reid heard them. and not only does he have cuts, he has twice as many cuts as the boehner plan, cuts that hurt a lot of the things a lot of us don't want to hurt. but we understand that we have to give something.
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so they get that. what do we get? we get certainty. we believe it is very important that we take this issue of the debt ceiling and we get it past the election, past january or february of 2013 and get back to the business of job creation and all the things we need to do. we get that. we get that. we also talked both side -- we d about, both sides, a committee that would look at the long-range deficit and debt, the need to do reforms and the need to look at what revenues make sense, and there is a committee in that bill. so this is a true compromise. and i agree, the other thing the democrats got is no cuts in social you're an -- social secuy
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and medicare. but if you really, truly look at this, the reid plan gives the republicans more than even he gives the democrats. but it is worth it to us to get certainty in the markets, to protect social security and medicare, to avoid the chaos of the boehner plan. avoid the danger that we face if our bonds are downgraded. the boehner plan risks catastrophic default and we are concerned that if it were to pass, we would again see this economy being held captive, we would again be facing deep cuts in medicare and social security, we would again be facing, you know, all kinds of hostage taking to protect the
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millionaires and the billionaires. i believe that no one who loves this country, regardless of political label, should take any action to result in america becoming a deadbeat nation. i'm a first-generation american on my mother's side. my mother never even went to high school, because during her time in high school, her father got very ill and she had to go to work. and because i was born in this country, even though we had barely anything, i was able to get an education. i was able to go toe-to-toe with my colleagues who went to the fanciest schools. i remember when i went to brooklyn college in new york and they raised the tuition from $9
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a semester to $14 a semester, my dad looked at me and said, "honey, you're getting awfully expensive." i got a college education in this country. i got to the senate in this country. but i have to say, if we're going into a circumstance where everything we do to fight for the middle class is held hostage to protecting the richest among us, the billionaires, the millionaires, the multinational corporations, if that's the pattern we're getting into here, i fear for this country. and we can't let it happen, and that's why we've been very clear that the boehner plan just continues this hostage taking. so the reid alternative is the true compromise, mr. president. it gives us substantial cuts in deficits, it gives us a process for more deficit and debt reduction, it gives us certainty
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in the marketplace. in closing, i would say this. when each of us has won our election, we go up there to the place where you are sitting, mr. president, and we put our hand on the bible and we swear to uphold the constitution. and i had the honor of serving with senator robert byrd, who most of us here have, and he always carried around this constitution in his pocket. so today i took a look at section 4 of the 14th amendment and do you know what it says? "the validity of the public debt of the united states shall not be questioned." and i swore to uphold this constitution. it says the validity of the public debt of the united states aougt rised by law shall not be
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questioned. so i'm not going to play games with this. and i'm not going to allow the public debt to become a political football. i want to show you before i leave the floor just a couch more charts -- just a couple of more charts. this is what speaker boehner said july 11. said i'm not interested in a short-term increase on the debt limit. he said our economy won't grow as long as we continue to trip it up with short-term gimmicks from washington. this is what speaker boehner said, so what does he give us, mr. president? a short-term extension of the debt limit a few months. we can't do that, even his own words he says we hurt the economy. eric cantor said to "politico," if we can't make the tough decisions now, why would we be
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making those tough decisions later? it is my preference that we do this thing one time, putting off tough decisions is not what people want in this town. and yet, what do they do? they send us -- we don't know if they'll get the votes to send it, but they plan to send awes short -- send us a short-term deal which leaves this great nation in chaos. you talk to every businessman, they will tell you the worst thing they'd worry about is uncertainty. and that is the path of uncertainty. eric cantor said it, boehner said it, no short-term deal. they're sending us a short-term deal. and i'll close with the "new york times," the mother of all brainers, they say. if the debt ceiling talks fail, independent voters will see the democrats were willing to compromise but republicans were not. if responsible republicans don't take control, independents will
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conclude that republican fanatacism caused this default. they will conclude that republicans are not fit to govern, and they will be right. mr. president, i appeal to the republican colleagues in this senate chamber who have shown working with senator durbin, working with senator warner, working with others on our side, senator conrad, that they are willing to come forward and do something meaningful and put the politics aside. and i hope they will do just that. they will find in leader reid someone who understands the art of compromise, who understands that we have to put aside our party labels and do what's right for this nation. thank you very much, mr. president, and i yield the floor.
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a senator: mr. president? the presiding officer: the senator from west virginia. mr. manchin: mr. president, i rise today to pay honor a life cut tragically short, to a young man whose service to this country went beyond the call of duty. west point cadet jacob bower, who is from my great state of west virginia and my hometown of fairmont, died at the age of 18 last week and will be laid to rest friday at a family cemetery with full military rights. he was the sort of young man who would make any, any parent proud. he was a three-sport athlete in high school where he graduated from 2011. he was in the national honor society and was valedictorian of his graduating class. he led peers by example. he had something that set him apart. he was a young man that felt the spark to attend west point. i learned from his mother ginger that as a young man, or a boy,
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really he was, he was very interested in history and he studied the paths that formed our greatest leaders. the men and women whose names are in the history books. and he learned that the best of the best have attended our military academies and he told his mother that's what he wanted to do. i really think he wanted to be in the history books. he wanted to be a part of that and he wanted to give something back. he also told his mother, he said i've had everything given to me. it's time for me to give back now. cadet bower was 18 when he died during a land navigation exercise thursday of what may be a heat-related cause but we're not sure yet. it's too early to tell. we do know that cadet bower trained vigorously before the exercise and had successfully completed the first three weeks of his six weeks of basic training. nothing can explain a death so tragic, a life cut so unfairly short. this is the one time above all
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others that you have to believe and trust in your faith. my wife, gail, and i send our prayers and thoughts to cadet bower's mother ginger, his father dean and his brother ryan, the entire bowers family and their friends. and we continue to pray every day for the safety of the brave women and men who put their lives on the line every day for all of us. mr. president, mere words cannot pay tribute to the magnitude of this tragedy and the depth of his sacrifice. and in these challenging times our entire country would do well to think of cadet jacob bowers as we work together to put this country first, as he did, before our own interests. our thoughts and prayers are with this family. may god bless them through this difficult time and may god continue to bless the united states of america. mr. president, i yield the floor. mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: let me salute my colleague from west virginia.
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it's a sad task that we have to come to the floor and to recognize those who have passed, but he pays tribute to a young man whose life was cut too short and who was determined to serve our country. i thank him for bringing that man's life to our attention in the senate and to those who follow us across the nation. i'm sure the senate joins him in expressing our sympathy to the family in this tragic loss of their son. i thank senator manchin for coming to the floor. mr. president, many people have asked about the state of the recession and our nation and what it will take to turn this economy around. there is a lot of speculation, and i don't profess to be an expert, but i think there are two things that are really hurting us and that we will have to deal with to bring ourselves out of the current state that we're in. one of them is the price of real estate. i don't think we have quite reached the point where we know
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where the bottom is on real estate values in many parts of america, and that has been a real problem, because for many homeowners and buyers, it means that they are under water. the value of their home has gone down below the value of their mortgage. and some of them give up and others have to give up when they lose their jobs. this real estate market and its volatility, the foreclosures that have followed still haunt us years after the subprime mortgage fiasco that led us into the recession. but i think there's another element that is even more basic. mr. president, my mother and father were married in 1928. my first brother was born in 1930, and the other in 1932. they started their family in east st. louis, illinois, my dad working for a railroad, my mother an immigrant woman who worked as a switchboard operator at a telephone company in east
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st. louis, illinois. they each had eighth grade educations and they were hardworking folks. that's the way they were raised. they started their family as the great depression started, and they never forgot it as long as they lived. i used to take a look at their lifestyle and think that's the lifestyle of every family in america because that's all i knew. but now that i look back on it, it was a lot different. my mom and dad, because of that depression experience and starting a family, had some basic rules in our house. never borrow money. save it. and when you've saved enough, buy what you need. otherwise, wait and do without. i thought that was the way everybody lived. it certainly was the way i was raised and my brothers. they also had some basic things that they did to save money. even after years have passed, decades passed, and they were
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comfortable by middle-class standards, they were always very careful in the way they spent their money. i always felt that perhaps there was a fear that those bad times might come back and they want to be ready. that was the way i was raised. it's the way my wife and i raised my children, the way my wife was raised from depression-era family who having lived through the experience modeled their lives afterwards based on the fear and concerns they had during the great depression. something happened over the last several years which calls that to mind. in 2007, households across america had borrowed the equivalent of 127% of their annual income. 127%. in the 1990's, the average was 84%. so it was literally a 50% increase in household indebtedness in a matter of 15 or 16 years. and though americans had been working hard to reduce that debt
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because they understand what a drag it is on their lifestyle and their wages, the debt-to-income level in america is still 112%, still substantially higher than it was back in the 1990's when it was 84%. it slows down economic recovery. people who are trying to shed debt are careful not to incur new debt, not to buy the things that would put them in debt. and that slows down the purchase of goods and services. just exactly the opposite of what you need when you're recovering from a recession. so i think those two elements -- the value of real estate and household debt -- are really holding us back on this economic recovery. there's one aspect of household debt that i'd like to call the attention of the senate in our record of proceedings, and that is the fact that in october of last year we reached a milestone in america most people didn't notice. for the first time in the history, modern history of our
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country, total student loan debt exceeded total credit card debt in the united states. $850 billion outstanding in student loan debts across america. now, mr. president, i don't know your circumstance, but mine was borrowing money to go to school. national defense education act loans. and this will date me for sure, but when i graduated law school in the late 1960's and they accumulated all the money that i had borrowed, undergraduate and law school, they came to me and said now you've got to start paying it back 12 months from graduation. you pay 10% a year until you pay it off with a 3% interest rate. and i gulped and said how much is it? and they said it's $8,500. i thought i was finished. i couldn't imagine coming up with $850 a year plus interest to pay off my student loan. my wife and i had a baby and
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another one on the way and i was starting a new job that didn't pay a lot of money. i couldn't imagine how i was going to do this, but i did. now that i look back on that and consider what students face today, it's no wonder they laugh when i tell that story. $8,500. i'd be lucky to get through the bookstore at most colleges and universities today. i -- i may be exaggerating just a little bit. last year tuition at a four-year nonprofit college was $27,000. the in-state tuition at public four-year universities averaged averaged $7,600. cost of room and board of course would raise that higher. tuition has been raising faster than inflation for the last 20 years, sometimes growing at more than double the rate of inflation, but household income hasn't been growing, so more and more families, unable to pay for their kids' education, join their kids in borrowing money, student loans. sometimes they cosign. in a bad economy, some students who never anticipated having to
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take out student loans are forced to do it, and others have had to borrow more than they expected they would. in 2009 alone, student borrowing grew by 25%. today, two-thirds of college students borrow to pay for college. the result is a generation of young americans beginning their lives, their professional lives with unprecedented levels of debt. the average student leaves college with $31,000 in student loan debt, but it's not unheard of to run into students who have a lot more debt, sometimes as high as $100,000 for an undergraduate degree. going on to graduate school or law school is very expensive. i went to georgetown law school. i cannot even remember what the tuition was when i went there, but i would be amazed if it was more than, say, $1,500 a year. it's now $50,000 a year at georgetown law school, which means if you borrowed the money to finish law school on top of your undergraduate debt, you have just added $150,000 in debt
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to your life before you draw your first paycheck. now, if you're lucky, one of the best law students, you might get into a law firm that pays you a huge amount of money. most law school graduates will not. they will make life decisions then based on their indebtedness and how to pay it off. students who begin their adult lives paying $600 or $1,000 a month on their student loan payments have to make some difficult choices. they may put off doing the job they really wanted to do or buying a house or even getting married. they may end up moving back home with their parents which more and more students do. and it's tough to imagine how you get out from that debt burden and create a life, a life that leads to savings and happiness in retirement. high levels of household debt keep these borrowers from contributing to our economic recovery. we need young people to invest in the economy and help it. some of these students will find they can't afford monthly payments and they face default.
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here is something we cannot say enough to students today who are considering a college education. there's something you ought to know about a student loan. it's not like your car loan. it's not even like your home loan. it's not like your credit card debt because student loan debt is not dischargeable in bankruptcy. what does that mean? that if you get in deeply over your head and cannot possibly make the payments, you're stuck. you can't discharge that debt in bankruptcy. you will carry it with you to the grave. it's with you for the rest of your life. that's the difference between student loan debt and a lot of other loans that people take out. now, mr. president, as tuition growth has outpaced federal student loan limits, private banks and lenders have entered the higher education marketplace with private student loans. i don't know why -- i certainly wish i would have been more attentive to this when it happened, but we decided years
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ago to treat government student loans the same as private student loans, which means if a private entity loans you money for school, they are protected as creditors like the government. in other words, even if you borrow $10,000 from a local bank to go to college as a student loan, you can't discharge that in bankruptcy either. you're stuck with that for a lifetime. it doesn't apply to virtually any other debts other than perhaps tax liability under the bankruptcy code. so it's an unusual situation we have created and an unusual burden on young people. federal student loans for most undergraduates are capped at at $5,500 for the first year of school and go up to $7,500 a year by the time a student graduates. that doesn't always cover the cost for students when tuition can exceed $30,000 at private colleges so students turn to private student loans to fill the gap. this can be disastrous. these private loans are made with interest rates and fees as
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high as credit cards. there are reports of private loans with variable interest rates reaching 18%. and unlike federal student loans, there are few consumer protections. students don't have access to flexible repayment plans, free deferment or loan forgiveness with private student loans. some students who take out private loans find themselves trapped under an enormous amount of debt. and because of the bankruptcy law, it's a debt that they are stuck with the rest of their lives. i want to say a word about another phenomenon. today secretary arne duncan spoke before chairman harkin's appropriations subcommittee on education. i think secretary duncan is one of the president's best appointments. not to mention the fact that we have been personal friends for a long time, and i watched as he struggled to change the chicago public school system. it goes beyond his efforts in public service. he has really given a lifetime to education. his mother was a teacher. he used to tutor kids after
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school. he really has it in his blood that shows. i think he is a man of great immense personal talent and integrity and he has done some remarkable things in the tenure that he has had at the department of education. today when he came to testify, we talked about a phenomenon that relates to this. i explained to him how i borrowed money to get through college and how students today borrow more than ever with student loan debt passing credit card debt. then we talked about the phenomenon of for-profit colleges. here's what the facts are. when you take students who have finished high school, 10% of them go to for-profit schools. these for-profit schools are not your local community colleges, even your traditional public or private universities. they are businesses. 10% of the students go to these private schools, for-profit schools. but the for-profit schools end
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up receiving 25% of all federal student aid, far in excess of what you might expect with 10% of the students, 25% of the pell grants and federal student loans go to for-profit schools, and then there is the default rate, the student loan default rate is highest at the for-profit schools. it's 44%. the rate for public colleges and universities is in the single digits, and those for private universities is not quite 20%, but 44% for for-profit schools. what it tells you is these students were attracting more federal student aid end up defaulting more when it comes to the payment of their debt. for-profit colleges are the fastest growing sector of higher education. in illinois, enrollment has more than doubled over the last decade in these schools. the largest chain of for-profit colleges, the university of phoenix, has become the second largest higher education system
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in america. there are over 450,000 students at the university of phoenix, more than the combined enrollment of all the big ten colleges and universities. a for-profit college education isn't cheap. tuition at for-profit schools is five and a half times the price of community college and twice as much as public four-year college. two-thirds of the for-profit students receive federal pell grants which target low-income students and don't have to be repaid, but pell grants aren't enough to pay for for-profit schools. to make up the difference, students take out loans at four-year for-profit schools, 96% of students are borrowing money. and when students leave school, many for-profit college students find their training didn't prepare them for a job and the employers don't recognize their degrees. buried in debt, without good career and job prospects, these students simply can't keep paying the loans. that's why the default rate, 44%, is so high.
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within three years, 25% of students who leave a for-profit college will default on their student loans. let me tell you the story of two of them. christine lives in southern illinois. she received a degree in medical billing and coding from sanford brown college. she took out student loans to pay for college and she now owes a total of $24,000 for her two-year associate's degree. she now refers to that degree, and i quote, as completely worthless. christine said that when she went interviewing for jobs, one company told her her degree was a strike against her. another said they don't hire sanford brown graduates because they have to retrain every one of them. she wasn't able to find a job and she put her loans in deferment to go back to school and borrow more money. another student, michelle, she spoke at a forum i held in chicago a year ago. michelle received a degree in criminal justice from westwood college, and she wanted to be a police officer.
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after graduating, she learned that the law enforcement agency she had applied to in illinois would not recognize her diploma from westwood. she was left with nearly $90,000 in debt. she has no career prospects. michelle is living at home with her parents in her basement. she is working part time seasonal retail jobs, struggling to pay about $900 a month on her student loans. she can't borrow any more money now to even go back to school and get a degree that might help her. instead of contributing to society, she is trapped. michelle's school loaded her up with federal and private student loans for a degree that wasn't worth anything when she graduated. because of her student loan debt, she is not going to be buying a house. she can't save for retirement. she certainly can't invest. she can't even go back to school to start over. because there is no escape for her, no bankruptcy protection, she may be burdened with this debt for the rest of her life. mr. president, we can't continue on this path. when i sat down on the budget
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negotiations, one of the things president obama put on the table was extending pell grants. there was a time when i would instinctively say sign me up because i believe that if you don't help that generation of students, like myself, who don't have the resources to go to school, you're denying them the opportunity that i had. i think young people deserve that opportunity, but i have to tell you now that when i hear pell grants and student loans and consider these for-profit schools, i stop and think we have got to step back and ask which of these schools are good and worth supporting and which are not. i said to secretary duncan today, we should have accreditation standards so these schools are known to be worth the money the students are paying to attend. we should follow their progress to make sure that if they are ensnaring young people in debt and then dumping them into a jobless situation in life, that we stop downsizing them with federal student loans -- subsidizing them with federal
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student loans and pell grants. that's incumbent upon us. the administration recently took up the for-profit college cause. they are asking for more reporting. it's a step in the right direction. as i said to secretary duncan, we should have done more. you're going to find the worst of the worst. maybe you will stop them from exploiting the students, but there are going to be a lot of awful schools still in business because our standards are not as strong as they should be at the federal level. mr. president, as we consider the future of higher education, let's consider the fact that the cost of it is outstripping the resources of many families, the debt that students incur will change their lives and that there is a process of exploitation at many of these for-profit colleges that we should not tolerate. it's not fair to the students or their families. it certainly isn't fair to america's taxpayers because as they default on these student loans, the american taxpayers will be the ultimate losers. mr. president, i yield the floor. the presiding officer: the majority leader. mr. reid: thank you very much,
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mr. president. i now ask unanimous consent the senate proceed to executive session. the presiding officer: without objection. mr. reid: mr. president, i now ask that we move to calendar number 196, the nomination be confirmed, the motion to reconsider be considered made and laid on the table, there be no intervening action or debate, no further motions be in order, the nomination and any statements related to this nomination be printed in the record. the presiding officer: without objection. mr. reid: thank you, mr. president. i now ask that president obama be immediately notified of the senate's action. the senate then resume legislative session. the presiding officer: without objection. mr. reid: mr. president, i ask unanimous consent that we extend the morning business hour until 7:00 tonight. the presiding officer: without objection. mr. reid: i also ask, mr. president, that that consent agreement be modified, that senators would be allowed to speak for up to ten minutes each during that period of time. the presiding officer: without objection. mr. reid: i would note the absence of a quorum.
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the presiding officer: the clerk will call the roll. quorum call:
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quorum call:
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the presiding officer: the senator from ohio. mr. brown: mr. president, i ask unanimous consent to dispense with the quorum call. the presiding officer: without objection. mr. brown: thank you, mr. president. i rise to discuss legislation called the all-american flags act of 2011 and make some comments about sort of what's happened to american manufacturing and how this is a small step but an important step in beginning to convince this body that "made in america" is something that we should focus on, that a manufacturing strategy from the white house is something that the they should s on and putting people back to work to make things in america again is the right strategy to pull us out of recession. the labor department most recent jobs report confirmed what
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workers in my state are already aware, that companies are still not hiring. they're seeing smaller paychecks and barely keeping up with bills and insurance companies. soldiers, in too many cases returning from iraq and afghanistan, are facing even greater challenges in the working market. i was at youngstown university talking, there are programs there, there's a group through magnet in youngstown in northeast ohio about putting -- getting -- helping soldiers and sailors and marines leaving the service, integrating into the classroom and helping them find jobs in that region, someplace we've fallen woefully short. manufacturing, which was moving along steadily earlier this year, we had seen 12, 13, 14, 15 months of job growth in manufacturing, not enough job growth but some, that's even slowing down. steps taken through the auto rescue and other things we did in the last couple of years dealing with this terrible, terrible recession created in
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2007 and 2008 the auto rescue saved millions -- auto rescue and other efforts saved millions of americans from joining the unemployment rolls and we're seeing a better auto industry, an auto industry coming back, especially in places like defiance and toledo and northwood and cleveland and lordstown, ohio. bit the challenges remain severe. like many in this chamber, i believe manufacturing is key not only to our economic recovery but to the strength and vitality of our nation. to many, manufacturing is also a ticket to the american middle class. in the last -- that last 12 years -- in the last 12 years, we've witnessed the closure of more than 54,000 factories in the united states. 54,000. last year, we lost 8,000. that's 5,400 tac factories per , 15 per day in the last 12 years. the manufacturing sector since the beginning of the bush administration, since 2001, has lost 5 million jobs. only 11.5 million people are
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employed in manufacturing jobs now. last time it was that low was 1941, before the country scaled up for -- for production for world war ii. now when members of this body talk about the need to support manufacturing, others will say, well, that's picking winners and losers and government has no role in helping manufacturing. well, first of all, that makes no sense. but second, i've heard those things before. i think the government already has picked -- has picked winners and made choices. manufacturing in the 1980's, early 1980's was 25 -- exceeded 25% of our g.d.p. now it's only 11% of our g.d.p. over that same time period, financial services back 30 years ago was about 11% of our g.d.p. now they are about 21%. so a government that put way too much focus on and interest in and support for financial services at the expense of manufacturing is clearly -- has clearly cost us far too many middle-class jobs.
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it's a result of tax policy, it's a result of not investing in innovation. it's a result of china pntr, permanent normal trade relations, it's a result of nafta, it's a result of not enforcing our trade laws. there's blame to go around but the blame won't create the job that a former auto worker in youngstown or a rubber worker in akron or a chemical worker in columbus or a steelworker outside cincinnati, that won't create a job that they're looking for nor reduce the rising costs for them of food and gas and shelter. i urge my colleagues to consider taking big steps -- big steps -- not just slight changes to the margin, in rebuilding our manufacturing base and rebuilding the middle class. those steps include rebalancing our economic policies, reinvesting in education, reinvesting -- putting real support into work force traini training, enforce trade laws that increase -- that -- that defend -- enforce trade laws that increase our exports and defend against unfair trade. three examples, mr. president,
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of enforcing trade laws have happened in the last couple of years. thanks in part to a -- a more aggressive obama administration, finally, on trade law. we've seen jobs created, hundreds of jobs created in lorain, ohio, and youngstown, ohio because of enforcement of trade laws on oil country tubular steel. we've seen rub irworker jobs, tire manufacturing jobs -- rubber worker jobs, tire manufacturing jobs created in finland, ohio, because of enforcement of trade laws. we've seen coated paper plants. but we don't see enough of that. there are other steps i believe are more modest that demonstrate a commitment to our manufacturing sector. one steps requiring the federal government when purchasing flags to purchase only those flags that are 100% american made. that sounds fairly amazing, that they're not made in america today. it sounds fairly amazing that that would make much difference, but really it does.
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currently, federal law simply requires that american flags purchased by the u.s. government contain a minimum of 50% american made products or components. so you buy a flag -- the united states department of defense, the united states department of homeland security, or the united states capitol bielz american flags -- buys american flags, under american law, they only have to be 50 percent american made. these are american flags, mr. president. and this legislation we'll be offering today which has the support of senator rockefeller, democrat from west virginia, senator collins, a republican from maine, senator sanders, a democrat from vermont have joined me as cosponsors. it honors our country by ensuring american flags flown over government buildings are actually american flags. according to u.s. census bureau, the value of imported american flags in the united states last year was $3.2 million with $2.8 million coming from china. i -- i just -- you know, when i think about -- when i think about all the production in china, i -- i often think about young workers -- and when i say young workers, i mean young
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workers in china -- that make things that people in the united states buy. and i just think, i got to think chinese workers, if they think about this stuff while they're doing it -- maybe they do, maybe they don't -- they must be a bit amused that they're making american flags in china, selling them to us. they must think, what kind of country is this that doesn't make its own flags? i just -- it's t just occurred to me that, mr. president, that's -- that would be amusing if it weren't -- if it weren't somewhat tragic. the congressional research service said there are at least eight all-american flag manufacturers in the united states, eight companies that can do this. this isn't a question of, you know, rare metal as that we can't get, rare earth materials we can't get enough of. i know the senator from colorado's been interested in that issue, the presiding officer. increased demand for made in the u.s.a. flags will lead to increased jobs at home, of course, because we'll have more. thanks to this legislation we'll have more production of it. at a time when we're facing economic hardship, it's critical we invest in our manufacturing base, there's no -- there's no product that deserves a made in the u.s.a. label more than american flags. manufacturing helped our nation
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become an economic superpower, it built a strong middle class. when you think of the combination of -- of large-scale manufacturing, of all kinds of products, and collective bargaining laws that let people come together and bairng -- negotiate and bargain collectively, it clearly is the way we built the middle class in this country. it's critical today the government lead by example. that's why in ohio, senate bill 5 is so important, the repeal of collective bargaining, the repeal of the of the repeal of collective bargaining, if you will. it's why manufacturing's so important. this legislation today that i will talk about in a moment -- that i will -- that i will bring up in a moment, mr. president, is a modest step towards that -- building that manufacturing strategy, moving forward on made in america and a modest step towards -- towards enhancing and strengthening our manufacturing base.
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the presiding officer: the senator from ohio. mr. brown: i ask unanimous i ass consent the homeland security committee be discharged from further consideration of s. 188 and the senate proceed to its immediate consideration. the presiding officer: the clerk will report. the clerk: s. 1188, a bill to require the purchase of domestically made flags in the united states of america for the use by the federal government. the presiding officer: without objection, the committee is discharged and the senate will proceed to the measure. mr. brown: i ask unanimous consent, mr. president, that the brown substitute, brown of ohio substitute amendment, which is at the desk, which we just discussed, be agreed to, the bill as amended be read a third time and passed, the motions to reconsider be laid on the table with no intervening action or debate, and any statements related to the bill be placed in the record at the appropriate place as if read. the presiding officer: without objection. mr. brown: thank you, mr. president. i ask unanimous consent, mr. president, the senate proceed to the consideration of s. res. 240, submitted earlier today. the presiding officer: the clerk will report.
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the clerk: s. res. 240, condemning the horrific attacks on government buildings in oslo, norway, and a youth camp at utia island, norway, on july 22, 2011, and for other purposes. the presiding officer: without objection, the senate will proceed to the measure. mr. brown: mr. president, i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table with no intervening action or debate and any statements related to the matter be placed in the record as if read. the presiding officer: without objection. mr. brown: i ask unanimous consent, mr. president, the senate proceed to the immediate consideration of s. con. res. 26, submitted earlier today. the presiding officer: the clerk will report. the clerk: s. con. res. 26, supporting the goals and ideals of the designation of the year 2011 as the international year for people of african descent. the presiding officer: without objection, the senate will proceed to the measure. mr. brown: mr. president, i ask unanimous consent the concurrent resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid on the table with no intervening
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action or debate and any statements relating to the matter be placed in the record as if read. the presiding officer: without objection. mr. brown: mr. president, i understand there's a bill at the desk. i ask for its first reading. the presiding officer: the clerk will read the title of the bill for the first time. the clerk: h.r. 1938, an act to direct the president to expedite the consideration and approval of the construction and operation of the keystone xl oil pipeline and for other purposes. mr. brown: mr. president, i ask for its second reading and in order to place the bill on the calendar under the provisions of rule 14, i object to my own request. the presiding officer: objection is heard. mr. brown: mr. president, i ask -- the presiding officer: the bill will be read for the second time on the next legislative day. mr. brown: thank you, mr. president. mr. president, i ask unanimous consent when the senate completes its business today, it adjourn until 10:00 a.m. on thursday, july 28. that following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day.
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that following any leader remarks, the senate be in -- in a period of morning business for one hour, with senators permitted to speak therein for up to ten minutes each, with the time equally divided and controlled between the two leaders or their designees, with the majority controlling the first half and the republicans controlling the final half. further, that following morning business, the majority leader be recognized. the presiding officer: without objection. mr. brown: mr. president, if there's no further business to come before the senate, i ask that it adjourn under the previous order. the presiding officer: the senate stands adjourned until >> "washington journal"
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continues.gton journal" host: we are back live jon hilsenrath of "the wall street
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journal." taking a look at this week's economic rebound, that is what the- taking a look at weak economic rebound. here is the headline from "the wall street journal" this morning, "companies bracing for the fall." guest: american companies are operating in a very >> they have already been disappointed by what happened in the first half of the year. i've been talking to companies in the last few days. i'm winnebago industries, a rv company, that was expected to have good spending in the first half. this didn't happen. they are back to deciding whether or not to cut back on that. what they don't want right now is uncertainty.
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that's what we are getting. >> host: you see the ups chief in todays "financial times" the small and mid sized companies that would be using his are pulling back. they are not sure. >> guest: right. this is largely, i think, because of the uncertainty they face. default, downgrade, you never now how investors are going to react. ironically what we have seen, investors have been calm. but the worry in corporate board rooms is we are going to have financial turmoil. one the interesting facets that i see, is american companies are sitting on a lot of cash right now. people can't figure out why they are not spending it. it is exactly one the reasons why they are not spending it and putting it to work. they live through lehman brothers, they woke up one
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morning in september 2008, and all of the sudden they didn't have access to credit markets. they couldn't go to commercial paper markets for short-term funding. they are hording cash because they are afraid of a another moment of financial disruption in markets and uncertainty. this is more of what we're getting. >> host: that is the new normal? for companies to hold on to cash? >> guest: it a certain extent, it is. it was possible in 2000s and 1990 toss live with a thin margin of cash because you feel like you've always had access to credit markets. the shock of 2008 shows the credit markets could disappear on you overnight. as a result they want to have more of a buffer than they did before. >> host: given what you just said. let's go back to the july 5th story. what is lagging the most to keeping the economic rebound from being more positive. >> guest: without question, the household sector, american households.
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they are coming out of the recession very much in debt, millions of households are sitting on mortgages and home equity loans that exseed the value of their homes. they are trying to pair back the debt, increase the savings, and as a result, they are very reluctant to spend. that's happening in an environment where unemployment is in excess of 9%. and they have, you know, -- either no job or the threat of job loss hanging over them. so we see a recovery where households are not behaving the way they have in typical recoveries. i think one the lines that you'll see in this is while i could let you go through this. >> host: no. entering does poseable income. the bounceback that we've seen in this recovery has been smaller than any one we've seen
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before. >> host: let me go back to home prices. i apologize. what we were showing the viewers, it was on the screen. i want to explain what viewers were seeing. you compare where our situation is now. that's the black line showing the current recession rebound. compared with what happened in 1980 compared with the average recession and then what happened in 2001. >> guest: right. >> host: what are the parallels here? what happened in 1980 that we can draw lessons from when we are looking at home prices? >> guest: well, 1980 is a good comparison. let's start with the red line. what we saw after the 2001 recession was -- we saw the fed cutting interest rates aggressively. and that helped to lift home values. it encouraged households to go out and borrow more money to keep spending, basically. households were fairly optimistic, even though we had a tech stock crash.
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that really is what propoled the recovery into the 2000. that lift that we saw in home prices. it's going in the opposite direction, which is why we are seeing a recovery that's different than 2001. the 1980 example was different world really. that was a world with very high inflation. the fed was raising interest rates very aggressively. and it basically rushed us into a pretty sharp recession. well, what's different between now and then is that the fed was after it had rung inflation out of the economy, in the early 1980s, it could cut interest rates very aggressively and get the economy going. that's exactly what happened in 1983 and 1984. we had an economic boom. the feds already pushed interest rates -- short-term interest rates to 0 and long-term to 3%. we don't have that lever to pull. which is another reason why we
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are in a more tenuous environment today. if you extended the line from the 1980, you would see the lift. we are highly unlikely to get that this time. >> host: let's go back to disposable personal income. you touched on that a little bit. look at graph comparing what happened in 1970 to the average, what happened in 1991 and the current situation with personal income. what's it take away? >> guest: well, the takeaway is american household is strained from two perspectives. if you think about a household as you would a corporation. the cash flow is trained. that's what disposable personal income is strained. after you take out taxes and account for inflation. because unemployment is very high, because we saw gas prices go up. and because we are seeing small wage, they are not getting a lot of new cash flow in.
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at the same time, the balanced sheets are strained because of all of the borrowing that i've been talking about that took place in the 2000s that. adds up to millions of households on the financial edge right now, even two years into a recovery. >> host: we'll get into all of the different sectors of this economy and what john and his colleague came up in the article. i want to bring this full circle and come back to the headline. rebound suggests the parallels to 1980 and other upturns. >> host: right. what parallels are you drawing? one recession that looks the most like what we're going through right now? >> guest: i would argue and other people argue in the stories that this is the worst since the great depression. if you look at it on a number of measures as the ones we've been talking about, disposable income, home prices, that certainly shows up. the scary thing about the
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comparison to 1980 is that we had -- what happened in 1980 is that we had a short term downturn which is related to credit controls that were being effected by the government. and then there was an upturn as those were taken off. then we went right back into another recession. that's the troubles thing about what happened in 1980. it's really -- it looks so bad because there was another recession that happened in 1982. and yet you have to start worrying about whether we're heading down that pathogen today. you know, the other comparison that people make is with the 1930s, where we actually had a pretty decent recovery that was taking shape in the middle of the 1930s. and then in 1937, the economy pushed back into recession. two reasons, one is because the fed, the fed reserve decided to reign in the credit too aggressively and too soon. the other is because the
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government went through very aggressive fiscal retrenchment. >> host: after stimulus spending? >> guest: well, yeah, after all of the pump priming that the roosevelt administration did. they pulled back on that because there was concerned about the budget. and the economy was back in recession in 1937. those are certainly parallels that we have to take into consideration today. when it comes to these deficit debates. the fed has made clear, it's not raising interest rates any time soon. ben bernanke, the fed chairman, studied the great depression as an academic. he feels he learned the lessons of the great depression. he feels he's in no hurry to start raining in the stimulus. we're certainly in the middle of a debate right now about the fiscal environment and we're certainly in a situation where fiscal policy is going to be tightening over the course of the next few years. one the questions that i think has to be a part of this discussion is how aggressively
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do you do that. it's hard to answer. because on the one hand, you want deficit reduction that's going to be credible. and a lot of people make the valid argument that you can't make promises to raise -- cut spending or raise revenues five years down the road, down the road people don't trust that congress will follow through on that. but on the other hand, if you do it aggressively upfront, then you run the risk of slowing the economy again by pulling it back too aggressively. there's a very delicate balance that has to be struck right now. it's being debated, obviously, in a very tense political environment. so we're at an interesting political moment to say the least, economic moment too. >> host: inside the economic comeback. you are up first. go ahead. >> caller: yes, first i'd like to make a comment to you please quick. >> host: okay. >> caller: that lady called in first time going to be on social
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security and this. she -- no one is going to steal her social security. and you didn't -- you said right there, and just let her go on and on. republicans are going to steal her social security. you know that's not true. you didn't come back and say anything to her. >> host: the beauty is you get to call in and say something. do you have a question or comment from the guest? >> caller: okay. sir, is the reason they are not hiring in the country right now is because of the rules and regulations that the republicans are trying to get hands strum that the democrats had dp and everything. all of the uncertain nit health care bill. so many rules and regulations. is that the main problem that we're not hiring in america. >> host: you know, i would say it's perhaps part of the problem. it's very hard to quantify. >> guest: the fact is unemployment was rising before
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the obama administration came in. of course, it's continued to rise quite a bit since then. you know, the fact is the thing that everybody has to remember is we are living in a postfinancial bubble, posthousing bubble, environment. the political backdrop is very difficult to manage right now. but we had this expansion of credit, this expansion of debt which is, you know, now in the process of receipting. we had the housing bubble which is waying on us. which is an immensely important factor on what's happening. frankly, that would be here whether there was republicans or democrats in power. >> host: we have breaking news from the "associated press" you heard yesterday the cbo said house speaker john boehner would not save as much as he initially predicted. he said he will rewrite it so it does. now the cbo has said senate
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democratic plan, put forth by harry reid, plan to cut spending and would save $2.2 trillion over ten years. the congressional budget office released this -- >> guest: these estimates and plans are being derived in such a fast moving environment. it's hard to make credible estimates about what the savings are going to be. i think we have to expect some movement on these things and some reassessment as we go along. >> host: i want to go back to the viewers comment about whether or not companies are hiring. this is the jobs in america section of the waffle street journal this morning. and in the this own words, they have a couple of executives,
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larry paige of google and goldman sachs cfo who are talking about what it is inside the american job engine. what did you learn from these guys? >> guest: well, it's a very complicated picture. the previous caller was talking about rules and regulations. that's certainly on the mind of a lot of executives. you have to think that if they saw an economy that was growing where there was robust economic demand, they would look past some of these things. or at least take account of that and be in more of a hiring mood. at one of the core issues really is just a lack of demand. not seeing people spending money. i talked, for instance, a moment ago about winnebago. they were ready to start expanding and hiring and they stopped doing it when people stopped buying their rvs. that's what an executive wants
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to see. he wants to see people buying his products. >> host: that is the headline in the marketplace section of the wall street journal. what's wrong with america's job engine is the question they propose. let's go to susan in san diego. go ahead. >> guest: yes, good morning. i'm just calling to make a comment about this conversation. earlier, he was discussing how businesses are holding on to an awful lot of cash, waiting to see what's going to happen. i would also argue that consumers are doing the same thing. people are insecure about their jobs and i know myself and most of my friends are -- we are holding on to and saving actually. rather than going out and quote, you know, stimulating the economy by spending. >> i think that's absolutely the case. i've been spending the last few days, actually, looking more carefully at the kind of position that households are in. you know, you see millions of
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people out there who in addition to trying to save more are in a position where they are trying to pay down the debts that they accumulated in the last -- in the last ten years. you know, i think what -- what this all fits together in another way that i'd like to try to explain briefly. when we talk about the american job machines and why it's not working, when we talk about american households saving money and not spending, when we talk about why aren't companies hiring? there's a global rebalancing going on right now. which is deeply effecting the american economy. you know, the economy was very dependent for the last 10-20 years on american consumers, americans went out and they bought their homes, they bought nicer cars, they bought big flat screen televisions. and all of that consumption helped to drive growth. will, it also helped to drive credit higher. i think we're in a world now where the american economy is
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being forced to reshape itself. and we're starting to see the signs of this taking place. where the american economy has to become more export oriented where more of the stuff that we make to use an economic term, needs to be sent overseas to customers and consumers and places like china, in places like india and brazil. when i say the things that we make, things that are made here in america. american economy, actually as we speak is slowly becoming more explore oriented, more manufacturing. look at some of these charts, you actually see an upturn taking place in the manufacturing sector, in the expert sector. the problem is that in the last ten or twenty years as the economy became so dependent on american consumers who are now reluctant to spend. those sectors got hollowed out really thinned out. the growth we are seeing in manufacturing, for instance, believe it or not.
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we are seeing upturns and we have a story in the paper today about car makers helping to drive the recovery. we are seeing upturns in the midwest in the great lakes states. they are just not big enough anymore to drive the overall economy. it used to be in the 1980s and 1970s, we would have the big inventory where they would cut back and rebuild and drive the economy out of recession and into an recovery. manufacturing isn't big enough to do that on its own anymore. so the process that we're going through is a very long and very painful one. but we're starting to see the seeds of it taking place. >> host: does it have to be goods? or could it be services as well? >> guest: well, it certainly can be services. it can be, you know, you could think, in fact, of, you know, foreigners who come here for vacation. that's kind of an expert. we're exporting or services to
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individuals that come here to, you know, our hotels or restaurants. and this service sector has become a much bigger part of the american economy. it's harder to export. we've actually seen india exporting services in the form of call centers. ironically, the american banking sector, which, you know, was such a central part of the own financial crisis is a big important global services sector. which has the potential to bring income in from overseas, consulting. american education is actually an important export. when we have all of these foreign students who come here to study in our schools, that's income that's coming from overseas into our pocket and helping to employ americans in the education system. so certainly services is part of that story. and those gears have to shift and become much more globally oriented. >> host: todd clay echoes.
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>> host: let's go to michael now, democrat caller in st. cloud. >> caller: yes, i'd like to comment on the republican guest you had. by the way win love your show. thank you. i apologize also for the caller who attacked you. i thought that was very rude and wrong because it's not your fall. anyway, i believe that when the question was asked to him, what was the plan about what would they do. he shoved it off and doubled talked and said that we want to cut the balance now and then we would decide what would we do later? this was the what we've been getting from politicians. which is politics is a pot of tricks almost. it's like voodoo going on here. i am so ashamed that the republicans and the democrats would not get this thing together. it was shameful to the world, actually, that they see this
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kind of childish acting going on. >> host: okay. going to leave it there, you are referring to the previous guess, not our current guest. about the weak economic rebound and inside the details. one of them is taking a look at corporate profit performance whip is show here. when you compare where corporate profits are today, that's the black line, past recessions and then rebounds what's the takeaway? >> guest: that american corporations are doing pretty well right now. part of the takeaway there, they are doing well in part because they focus so intently and expanded so aggressively overseas in the last 10-20 years. a lot of these profits are coming in from outside of the united states. now this is a double-edged sword. part of this is because they went out and did hiring in places like china instead of here in america so you have to ask yourself what good is that
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doing us? it also is income that's coming into american domicile companies and helping to hold up stock prices. americans have a lot of wealth in the stock market. it does benefit u.s. economy in that respect. i think there's a lessons to be learned from this for policymakers and households. which is that american corporations are doing well because they took a global view a long time ago. i think that's really what we have to be thinking about for the broader economy right now. how do we make it more globally competitive? american companies did that and the profits are among the strongest that we've ever seen in recovery. how is the american economy itself going to become more competitive and capable of selling it's goods and services overseaing? >> host: is that question relevant when you compare corporate profits with gdp? >> guest: right. gdp is unfortunately part of the downside. what you see with the gdp picture, again, the upturn that
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we've seen in gross domestic products. by the way, we are going to be getting fresh gdp on friday. they are going to be disappointed of growth less than 2% in the second quarter. this is among the worst from the perspective of economic that we have seen in the postworld war ii era. the only one that was worse, the 1980 double dip recession. again, that is because our economy is so dependent on households, on american households and the on american spending. and american households are going through a transformation right now where as your previous caller mentions. they are saving more, trying to pay down debt. they are trying to secure what they've got. because they are uncertain about the job market. >> host: here's a tweet from somebody.
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>> guest: if china owns the other half, it just so happened to be the case. which is a part of the global imbalances. i wouldn't say we are too big, you could argue the debt is too big. >> host: republican in new orleans. you are up next. >> caller: hi. i just want to say that i've been a democratic all of my life. i have voted republican at times. but my family was democrat. but i'm sitting on the fence now. because i'm really tired of the childish games that are being played in washington for the party sake. and they are not taking the stands for the people and the middle class is what makes this country go round and round.
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when, you know, you the lose and the politicians use the terms your kids and your grand kids, i say to that, we are the kids, we are the grand kids. >> host: all right. deane, independent in oceanside, california. >> caller: hi. when you said tense political environment, it hits the nail on the head. right now i'd love to see newspaper come out and say compromise. that's all the american public are asking for right now. i was feeling secure until they started talking about the deficit ceiling. if you have any intelligence at all, everybody knows you have to raise it. the deficit ceiling. and please explain to the people what it would mean -- what percentage, it would change. we would go from a aaa. the people don't seem to understand that.
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also why all of the disrespect for our -- the president. it doesn't matter what political party you are in. i hate when they refer to him as mr. obama or maybe that and when they quote him. is this typical of what goes on? >> guest: well, i would say, yes, it is typical of the way things get done here. you know, i've got a slightly different perspective on this debt ceiling debate that's going on right now. it seems to me this is -- we are seeing right now certainly difficult to watch and outgoing in terms of the politics. but in the same way that the economy is starting to go through adjustments that it has to go through, in order to become more globally competitive and in order to make americans more secure, the government is, you know, what i would say in the early stages of rethinking itself and the public is in the
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early stages of getting engaged in this debate. the debt limit is kind of acting as a trip wire to start a debate that economist have been saying for years, if not decades, needs to take place about the government's fiscal priorities, about entitlement programs, about tax policies, and how they are structured, how many needs to come in and what needs to get taxed. discretionary spending, military spending. these are really hard desessions. and, you know, the whole government, the whole government's mission kind of hanging on these decisions. i don't think that we could expect them to be resolved in a few weeks time. i think what we are seeing, unfortunately, because it's so hard to watch, is the first of what it likely to be a long running debate that goes through the election and is probability center piece of the 2011 election about what our government is, what we want it to be, and what kind of entitlement system that we want to have coming out at the end of
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this. it's going to be run on for a long time. i would warn viewers that it's not going to end when the debt limit debate gets resolved. they are only resolved -- they are likely to resolve the debt limit at some point, raise the debt limit at some point in the next week or two or three weeks because the consequences would be very severe if they don't. but they are not going to answer and resolve all of these questions. these issues of how the government manages it's fiscally are going to be with us for a long time. it requires the public to be engaged. they are not easy. we should expect to see difficult fighting around it. because there's hard choices to make. >> host: louisville, kentucky. john, republican, you are next. >> caller: i said i'm republican. i'm swinging towards the middle. it bothers me that everyone identifies themselves with a party. then you have no choice but to pull the lever.
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i urge all democrats and republicans to expect the correct and right answers, instead of identifying ourselves as a party. and your last caller just said that obama doesn't get any respect. is she kidding? go back and look at the bush years. look how they disrespected him, or the office, not the man, but the office. that being said, i want to mention, i'm in real estate. i see a great cross section. who's making money and who's living well in the economy? it's extremely highly technical and educated people. fortunately, about 70% of who i deal with, they are either teachers or they work directly or indirectly for the government. and that being said, isn't that an existence when no one is really producing anything in the circle of sphere of influence and the job markets are co-existent on government, direct or indirect parties. >> host: hey, john. can i ask you since you are in the real estate business, i want to show if you can look at your television, you and the viewers
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this graphic put together by the "wall street journal" showing bank lends and current rates where it stands in this recession and compared to past and similar situations in 1991 and 1949. are you feeling this as somebody who's in the real estate industry? >> caller: as far as the bank lending? >> host: yeah, the lack thereof. >> caller: the red -- oh, well, here's the deal. you know, the clinton years and the bush years in my opinion were false economies anyway. we had credit cards being produced and everybody utilized those. and then we went into the subprime markets where those were false. so most of the people that i have sold homes to back then, you wouldn't give them a $20 and say go to the food mart. they would not come back. we had to sell homes. that's part of having to do what you have to do. you can't discriminate. regardless if they were
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qualified and you sold them a home. >> "washington journal "airs live 7:30 eastern on c-span. we are going live to the capitol hill where the house rules committee will consider a new version of house speaker john boehner's bill. setting up a vote tomorrow. we see there in the room, representative david dreier, he's the chairman of the committee. we are waiting for him to gavel in. they say and confirm that spending cuts in the revised bill are greater than the debt limit increase. which house republicans said they need in order for it to pass in the house. [inaudible conversations] [inau] [inaudible conversations] :
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[inaudible conversations]
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[inaudible conversations] >> the rules committee will come to order. we are here for further consideration of s. 627 and the chair will be in receipt of the motion. >> mr. chairman i move the committee report the rule for essex 27 ek 20 laverne provides two hours of debate with one equally provided by the chair and ranking minority member. the committee will study minutes equally divided controlled by the chair and minority member of the committee of the ways and means, and 30 minutes equally
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divided by the chairman ranking minority member on the budget. all points of order against consideration of the bill. prince demint bin that h.r. committee report accompanying the resolution modified by the amendment printed in the report shall be considered as adopted. the bill as amended shall be considered as read. it points to the provisions in the bill as amended the rule provides one motion to recommit with or without instructions. will further authorizes the speaker to entertain motions to suspend the rules that any time through sunday, july 31st, 2011 that the measure was made available on the previous legislative day. the rule provides two hours of debate on motions to suspend the rules related to a balanced budget amendment to the constitution. the rule sets the date for the convening of the house or the anticipated performance sessions during the period from august 1st, 2011 through september 6, 2011 and provides
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the speaker may dispense with legislation business or the pro-forma sessions and declared the house adjourned to a time when the next pro-forma session day and provides approval of the journal during the pro-forma sessions from august 1st 2011 through september 6, 2011 and provides the days during the period from august 6 through september 6, 2011 shall not constitute a calendar day for the purposes of the war powers resolution. the rule provides the speaker may delay the referral of the introduced measures from august 1st, 2011, through september 6, 2011. >> you've heard the motion of the gentleman from dallas. as we know very well last night when we recessed we have just received as was pointed out in the hearing in a letter from the congressional budget office which raises scoring concerns. the rule we have tonight provides for consideration of the house amendment contained in
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the budget control act through the senate bill as we discussed last night which will allow because the fact we are dealing with such extraordinarily dire circumstances the august 2nd date by which time i need to increase the debt ceiling approaching we want there to be an opportunity for the expeditious consideration in the senate so that's the reason we are using the provision of the structure that we are right now. dhaka amendment we made available monday evening will be further modified by the revised amendment that's been on the website which addresses our scoring issues that were raised and creates a point of order against violation of the discretionary spending caps and makes a few other changes. now that amendment was made available to the minority and post on the web site at 5:50 this evening, and we know that this is a closed rule, but the minority will still be allowed and even though it is a closed rule still be allowed an amendment in the form of a motion to recommit. it also provides for
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consideration measures under the suspension of the rules as mr. sessions said through the weekend also nothing may be brought up under the suspension unless the text is available for one day prior. there was a lot of discussion about the balanced budget amendment, and i can say that we fully expect the balanced budget amendment we post on the web site to be debated and there may be other alternatives considered under the same process as well, and we do in this will provide an extension of the debate time for the possibility of a balanced budget amendment considered under suspension of the rules. the list of the suspensions the will be considered will be made available by the majority leader and as mr. sessions said at the end of his motion for two guys and we will not be able to pass in fact do provide for the
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structure that will be necessary for the house to continue in the session for the month of august. any discussion or amendment to the gentleman? >> to the rules i move the committee grant s. 627 and open rule so that all members may have the opportunity to offer amendments to the most important legislative event taking place here which will also perhaps included balanced budget amendment, change the constitution of the united states, and i would like us all to be able to provide amendments to the legislation. >> you heard the gentle woman. let me just say if i could respond this rule allows for the consideration of measures under suspension of the rules this does not deal with balance budget amendment. all it does is extends the debate time if there is a debate on the balanced budget amendment
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so more members will have an opportunity to participate, and we know that we are dealing with time constraints here as i think anyone who has been following this is well aware it's important that we move as quickly as possible we do want to ensure there will be adequate debate time on the house floor plan going to encourage my colleagues the notion of taking this senate bill with our amendment having considered a process. mr. polis. >> thank you, again. given that this bill has not been through many legislative committees or subjective any hearings i think an open rule should be made in order and i would therefore be supporting this motion. i also want to inquire again we have briefly discussed yesterday who was the sponsor of the bill, and i think the chairman claimed the bill. i asked the same thing with regard to the amendment i would like to inquire again there's no name on the amendment that
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appear on the desk and i would like to inquire who is the sponsor of this amendment to the bill. >> the rules committee is putting this in place. this is something done by tradition both political parties many times and that's the way -- >> to be clear are you saying that there is no member that is the sponsor of this amendment? >> it is being done by the rules committee and if the gentleman wants to as you all associate me with that with you are welcome to characterize it in any way you want because i know there is nothing i can do to say one way or the other. >> i would argue given that the chairman has the opportunity to amend his own bill i hope he can afford the best of a list of attendees as well. one point of personal privilege i would like to introduce we have a number of young people who are students at princeton university dillinger internships on the hill, my all modern and
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across all different parts of the government and they are observing the fault making process and learning about it here today. i will yield to the gentleman from massachusetts. >> i guess my question is -- >> welcome to the students. >> let me just thank my friend, and my grandfather who was a princeton alumni coming and i know that there is a wonderful institution. i've had the opportunity to visit, and i have including mr. mr. polis many great friends who are alumni so welcome, i hope you'll have enjoyed your internship, and i guess now that i've gone through all that i get to hear from mr. mcgovern. [applause] one of them is interning in the office of the committee, so i want to highlight that. i will yield to the gentleman
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from massachusetts. >> thank you. welcome. >> mr. chairman, since you're claiming authorship. estimate what the gentleman yield briefly i would remind my staff that senator leahy is the author of this bill that we have before us. senator leahy -- >> i would again reclaiming my time briefly, the senator cannot be the author of the house bill. >> it is not a house bill. >> i believe there was something regarding speeding the freedom of information act, which i believe having briefly looked at this bill again i understand we have to pass the bill to know what's in it but i am confident saying there is no expedited freedom of information act process used in this bill currently. the current leahy bill. i assume there is no longer in fact expedite the freedom of
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inflation act request perhaps indeed a worthy cause and one worthy of the legislative committee. but i don't believe the senate author would recognize the house amendment or the house dreier amendment and i would yield to the gentleman from massachusetts. >> thank you. i guess my question is about this amendment we are being presented with, and i am not quite sure what it means. i know the chairman says that it gets the numbers in sync with the ceo and where the speaker wants the bill to go but i guess my question is what does this mean for social security or medicare or the pell grants or the roads and bridges or student loans or any of this stuff. the chairman of the budget
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committee was made available so we try to ascertain the true cause of what we're doing. but this amendment is billions of dollars and i'm just wondering whether the gentleman from california can tell us specifically what is impacted by this amendment. >> reclaiming my time i would be happy to yield from moment to answer that and in fact we need to pass this bill or perhaps the chairman can in fact inform us how the bill of social security and medicare and questions from the gentleman of massachusetts. >> as you know last night when we received the letter, and this is the one entity that was put forward the proposal that has been scored by the congressional budget office. we found there was a spirit between the 1.2 trillion the 850 decisions up being $917 billion of savings as opposed to the
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1.2 trillion that had been anticipated, and the language that is provided addresses that issue, and i will say that as far as a negative impact on social security or medicare, there is no negative impact on these programs. in fact when it comes to the pell grants, as my friend knows, there's a bipartisan commitment to the program, and in fact there ins up being an increase in bill of will support for the pell grant program, but at the same time, we do have an opportunity to see significant savings, and so this measure, there's a number of technical changes we can get into that frankly i suspect can be discussed. i know that our staff director has been in touch with yours and going through this process, and so we want this resolved. all i will say further that the
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notion of saying that we are characterizing this and using the policy modeled of passing it before you know what is and it i think we have something called a free daily over requirement which was regularly waved. we are doing our best to adhere to and we have done this in this case. thank my friend for yielding. >> again, we are here with a multi trillion dollar i think there's some question about the size of it and now with the new scoring there's the dry year amendment that is perhaps a different size of the trillion dollar bill, two hours of debate on the bill, not a single hearing or single committee markup, and again, i don't know if it is a dry year model or but it is, but it's very much what is being done to it i would be happy to yield to the gentleman from massachusetts. >> and again, i don't mean to be a test about this but i'm just
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trying to figure out billions and billions of dollars being cut it must impact something i mean, something has to be adversely impacted thwart it i would like to know is it social security, pell grants, student financial assistance, is it environmental protection, is it roads and bridges? >> i would be happy to yield to the chair. >> would there be a point he would allow me to recognize myself? >> i haven't completed my comments yet. >> a bit encouraged the church also again the answer mr. mcgovern's question about what is being cut. there is actually many cuts that my colleague from massachusetts and i agree on on the excess defense expenditures and
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reducing fees on necessary wars and bringing the troops home and it doesn't make explicit mention on their but what does this mean? i think we are in the situation we have to pass the bill to know what's in it all because of social security or are we cutting food stamps, are we increasing pell grants, there's great uncertainty in this body with regard to this last minute trillion dollar bill that hasn't had a single hearing or single markup subject to the debate tonight and brought to the house under the proposed closed rule and unless it passes which strongly support to call upon my colleagues to support the amendment to have the bill that will cut something as the gentleman from massachusetts cut as am i coming and i would encourage this to be done if it has to be because of some
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deadline under open process that would enable others perhaps myself and others on both parties to offer amendments as the chair offered the amendment we would like to enjoy that to offer amendments to this bill and therefore i strongly support the amendment and i would be happy to yield back in hopes the gentleman can address my question. >> thank you. i appreciate the gentleman's call for questions. there's a number of things i'd like to go through. first, we are here because by august 2nd at the request by the president of the united states, we want to increase the debt ceiling, and over the past several weeks and months, they're has been discussions that have taken place in my not from going to get into characterizing but we are where we are and i think democrats and republicans alike we recognize
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the august 2nd is approaching and there is an imperative that we take action. i have been through countless increases in the debt ceiling and the three decades five served here we've seen increases in the debt ceiling take place many years before that. never before in the history of the republic have we seen a debt ceiling both take place, which actually is focus on getting at the root cause of why it is the debt ceiling needs to be increased, and that is bringing about the reduction of spending. this measure has broad guidelines. without the kind of specificity my friend has raised concerns about what we've heard a lot of items that were raised in the joe biden talks that took place and there was agreement on a number of areas of spending reductions and frankly talking with the ranking member of the former chairman of the
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agricultural committee of this was something that came and he explained how it came about, but he talked about the food stamp program and one of the things discovered and there was a bipartisan consensus to deal with this issue that if one simply qualifies for the low-income heating assistance program which is something is near and dear to my friend, and it's -- and my friend from rochester as well, and to lots of people, but if someone qualifies for the program, they automatically qualify for food stamps. well, it seems to me that there should be maybe deserving of food stamps maybe they are deserving of food stamps, but collin peterson and others and this was agreed to in the biden talks they would focus on the reduction in the similar wing of
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a temporary a systems if someone simply goes and for a 30 minute counseling under the program they automatically qualify for food stamps. maybe that person is deserving and necessary but the notion of saying there is an automatic granting of food stamps for someone who is simply receive counseling under the program or qualified is an example. i'm not saying that in the measure that kind of specificity exists. we have broad guidelines put forward and a level of spending that has been frankly agreed to in a number of areas through the biden talks, some with the president and senator reid. those are going to be targets and goals that we will put forward with some mechanisms
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that will ensure the enforcement mechanisms to guarantee that we do proceed with the actual spending reductions that i believe are going to be necessary if we are going to maintain our credit rating and as a nation in the global economy be as successful as we are today, and i hope will be in the future and i know my friend from boulder is a very strong proponent of the global leadership role and we have spent a great deal of time talking about that and i am hoping we will be able to be successful and i am happy to yield to anyone. >> again, we are not going to get any specific answers, but i don't want to this hearing to go on with anyone under the impression that somehow the massive fraud and waste and abuse in the snap program people are getting in large numbers that shouldn't be. >> to reclaim my time i was just
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quoting collin peterson their ranking member of the agriculture committee who was the chairman of the agricultural -- i also say the gao did an audit of the program and it's one of the best from government programs that we have and the error rate that is cited come every portion is underpayments to people. so, but this goes to the .1 of the things i'm frightened about what we are doing here is that the cuts are going to be in disproportionately poor people, vulnerable people, senior citizens. >> if i could reclaim my time, as i said, this was agreed to by the vice president of the united states, and i simply put this forward as an example, and i also made it very clear that i believe that people who were truly in need should qualify and
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receive the benefits of food stamps. what i said is there was two instances. one related to the program and free the other to the tennis program and the six and lawyers are things i believe in a bipartisan way we can work to address to ensure those people about whom all of us are concerned will actually get the benefits that are necessary, and we won't have the kind of problems that both democrats and republicans alike have existed -- have acknowledged exist with both the tanif program as it relates to food stamps, and i'm going to urge my colleagues to oppose the amendment of my friend from rochester. those in favor will say point those opposed, no. i think the noes have it.
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ms. slaughter unless we are passing out a rule than envy ayes have it. the clark report total of? [roll call] >> of the amendment is not agreed to. mr. mcgovern? >> i have an amendment to the rule to change the provision that gives one day's notice for the suspension bills so any
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amendment to the united states constitution being considered under suspension the joint resolution will be available through the legislative days and i would like a moment to be able to speak on it. >> please proceed. >> when we began this new congress, we talked about 72 hours that we would have the review the legislation. and then that was interpreted as three days with, now we're being told one day and we don't know if that is 12 hours or constitutes one day by this latest definition, and we are talking about something that a vote on the constitutional amendment is not absolutely necessary or is not necessary at all for the debt ceiling crisis. it could have been treed days
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after you decide to introduce it, but amending the constitution in the united states a balanced budget amendment to the constitution has been considered in the house on five occasions. the last time democrats brought it up was and 94. there were even hours of debate and five alternatives in addition to the base. the last time the republicans brought up in 1995, they allowed nine hours of debate and six substitutes. this allows the house to consider a balanced budget amendment that no one has ever seen, and i think if i am interpreting the comment right at me be more than the balanced budget amendment. it could be a member of them. but no one has seen it. we think it might be the one that is printed on the rules committee we can't be sure but the total is going to be with
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two hours of debate, no alternatives allow, and not even a motion to recommit, and i just want to on my colleagues on the rules committee i just want to quote the speaker bernard why quote if i'm lucky enough to be speaker i will not bring a bill to the floor that hasn't been posted online for 72 hours, and he didn't say 72 hours unless of course it's a constitutional amendment but it's considered under the rules he said very clearly on will not bring a bill to the floor that hasn't been posted for 72 hours. and my colleagues, my republican colleagues made a big deal about reading the constitution on the house floor, telling us how much they hold the constitution in high regard. and here we are talking about amending the constitution of the
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united states, not knowing what it is we are going to be voting on giving this a day, could be 24 hours or significantly less, and we are going to have a debate for a very short period of time with no alternatives. the constitution i think deserves better than that, and i hope my democratic colleagues in the republican colleagues will both support my amendment to the rule. >> mr. polis? >> i strongly support the amendment and i say that as someone who supports the balanced budget amendment as i mentioned in the committee the other day when i was first elected to congress i would like the congress to balance the budget and if come to the conclusion tabled unless we are required to. my colleague has a balanced budget amendment i would likely be supportive of fandom a co-sponsor of. i have no idea what the balanced budget amendment is brought up under

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